MGM v. Grokster, now known as the Grokster case, was decided by the United States Supreme Court on June 27th, 2005. The ruling was in favor of MGM where the court found Grokster liable for contributory infringement by third parties who use Grokster's software for file-sharing. The main defense for Grokster was the Sony case of 1984.
Sony Corp. v. Universal City Studios, Inc. was a huge stepping stone for copyright infringement activities. The United States Supreme Court ruled in favor of Sony Corp. having found Sony not liable for the infringements made by third parties using Sony's product. The product in question was the Betamax which allowed home audiences of television broadcasts to record any broadcast. The argument made was that this type of recording of a broadcast was an infringement of the copyright held for television shows and/or movies.
The court viewed Sony's product as allowing home audiences to do two things: 1) "time-shifting" and 2) "building a library." Time-shifting allowed people the convenience to videotape a broadcast and view it at a better time, because it would have otherwise been missed. This time-shifting theory was said to be in "fair use" in accordance with the Copyright Act of 1976. However, many people used videotaping to build up a library of television shows and movies which would be saved up for a long term; whereas time-shifting was a short term activity where each videotape would most likely be erased when it would be recorded over. There is no "fair use" in videotaping for the purpose of creating and storing a library of copyrighted materials.
Although these infringements had occurred the purpose of the Sony case was to see if Sony was liable for contributory infringe ...